After signing reform bill, Patrick to OK tax hike

By Steve LeBlanc
Associated Press Writer / June 26, 2009
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BOSTON—Gov. Deval Patrick pledged Friday to sign a 25 percent hike in the state sales tax now that lawmakers have approved three reform bills, including a massive transportation overhaul bill.

"Because of that, I will approve the new revenues we need to bring our budget into balance, offset the need for even more difficult cuts and expand opportunity throughout the Commonwealth," Patrick said in a statement.

Patrick made the pledge hours after signing the transportation bill designed to overhaul the state's road, bridge and commuter systems.

The new law eliminates the Massachusetts Turnpike Authority, but leaves intact the Massachusetts Port Authority and Massachusetts Bay Transportation Authority.

Nearly all other state transportation functions would be consolidated under a new Massachusetts Department of Transportation.

Patrick said the law will put an end to what he called "the Big Dig culture of deception, patronage and waste," referring to the nearly $15 billion highway project which was plagued by cost overruns, falling debris and leaks.

"Today, we are inaugurating a new era of streamlined and efficient delivery of transportation services to the residents of Massachusetts," said Patrick.

The sales tax increase from 5 percent to 6.25 percent is included in a state budget plan Patrick plans to sign Monday.

A portion of the sales tax increase, about $100 million, is intended to help the Turnpike avoid a toll hike which was set to take effect July 1. The Turnpike board has scheduled a meeting for Monday and anticipates voting to nix the toll hike.

Another portion of the sales tax increase is intended to help the MBTA close an estimated $160 million gap in its new budget. The T has warned of fare increases and service cuts. Officials said some fare increases could go into effect even with the extra money.

Patrick had initially proposed a 19-cent-per-gallon hike in the state gas tax to pay for the reforms in the transportation bill, but lawmakers didn't support the idea.

The bill signed by Patrick consolidates much of the state's transportation management under a new Massachusetts Department of Transportation administered by a Secretary of Transportation and overseen by a board of directors appointed by the governor.

The new law also changes the MBTA's controversial pension system that allowed employees to retire with full benefits after 23 years on the job. Under the new law, workers will need to put in at least 25 years and can't retire until they are at least 55.

It shifts MBTA, Turnpike and Tobin Bridge employees and retirees to the state health insurance program, converts Turnpike and Tobin Bridge employees to the state retirement system and eliminates the Massachusetts Aeronautics Commission and Outdoor Advertising Board.

"The restructuring of our cumbersome and inefficient transportation system is a landmark achievement that will dramatically improve the way we deliver transportation services," said Senate President Therese Murray, D-Plymouth.

The law retains the discount for Fast Lane transponders and requires that revenue received from tolls be applied exclusively to the payment of debt service on tolled roads and the cost of maintaining the roads.

It also brings the highway department, the Turnpike and the MBTA under the state's tort liability provision -- capped at $500,000 -- with the exemption for MBTA for serious bodily injury or death.

Officials hope the changes in the law will help the state save billions over time as it grapples with the escalating costs of maintaining aging roads, bridges and public transit services.

A 2007 report by the state Transportation Finance Commission estimated it would cost an additional $15 billion to $19 billion over the next 20 years just to maintain the state's existing transportation system.